__When $6/gallon sounds like a steal...__ you know the pump anxiety is real. US fuel producers are on track to rake in record cash windfalls. The largest independent oil refiners — __[Valero](https://robinhood.com/stocks/VLO)__, __[Marathon Petroleum](https://robinhood.com/stocks/MPC)__, and __[Phillips 66](https://robinhood.com/stocks/PSX)__ — are [poised](https://www.wsj.com/articles/refiners-rake-in-cash-after-gas-prices-surge-11658405412?mod=business_lead_pos2) to collectively make $14B from refining this quarter. Oil biggies like Valero start reporting this week, and the expected profit margins are wild:

- __[Exxon](https://robinhood.com/stocks/XOM),__ which reports Friday, said its fuel profits could balloon to $4.4B. Compare that to an average profit of less than $860M for the same quarter from 2017 to 2019. Thanks to fuel prices, Exxon forecasts that total earnings could hit $18B — which would be its most profitable quarter in decades.
- __[Chevron](https://robinhood.com/stocks/CVX/),__ which also reports Friday, is expected to have profit nearly [triple](https://www.nasdaq.com/articles/here-is-what-to-know-beyond-why-chevron-corporation-cvx-is-a-trending-stock-0) from the year-ago quarter. In the first quarter, its earnings more than *quadrupled*.

__But oily profit could be peaking...__ or may’ve already peaked. Summer is usually a busy driving season, but jaw-dropping gas prices are starting to keep Americans off the road. Drivers pumped 10% less fuel in the week ended July 9 compared to last year. Meanwhile, refineries are cranking at full capacity. 

- __Less demand + more gas supply =__ shrinking profits for gas giants. Case in point: gas prices have [dropped](https://www.vox.com/2022/7/22/23271456/gas-prices-falling-inflation) for 30 days straight. 
- __Everything’s relative.__ Since refining capacity was drastically slashed mid-pandemic, inventories are still relatively low, and prices are still relatively high. 

The end of oil’s golden age? (Barry Lewis/InPictures via Getty Images)

Pumped

__A recession could tank gas prices…__ And if the US isn’t already in one, it likely will be soon. Higher supply and lower demand are already pushing down gas prices — but a recession could tank them. Oil fuels the wheels of economic activity, and suffers when it slows: an economic downturn means less traveling, less spending, and less manufacturing. But for this year at least, refiners are on track for some banner profits.

From Exxon to Valero, oil big shots are expected to rake in historically huge profits — but the gassy golden age may be over

__Goodbye, my coin…__ Last year Elon claimed Tesla had “[diamond hands](https://decrypt.co/71398/elon-musk-tweets-that-tesla-has-diamond-hands-cushioning-bitcoin-slide)” for __[bitcoin](https://robinhood.com/crypto/BTC/)__. Turns out Tesla sold [75%](https://www.bloomberg.com/news/articles/2022-07-20/tesla-converted-about-75-of-bitcoin-purchases-to-fiat-currency) of its bitcoin (worth $936M) as of last quarter. On last week's earnings call, Musk said Covid crackdowns in China forced Tesla’s (apparently paper) hand since it needed cash. BTC's price has plunged since Tesla bought $1.5B worth last year, but the company says it sold at a gain. The EV icon stopped accepting bitcoin as payment last year. Its unloading of the OG crypto could signal an end to Musk's days as a crypto hype man.

__Asada bowl, extra guac…__ and a side of organized labor. Last week __[Chipotle](https://robinhood.com/stocks/CMG)__ [closed](https://www.nytimes.com/2022/07/20/business/economy/chipotle-union-maine.html) a store in Maine after workers filed to form what could’ve been the chain’s first union. Owners cited staffing issues, but workers called it union backlash. It’s not just Chipotle: US labor organizing is rising, and 200 __[Starbucks](https://robinhood.com/stocks/SBUX)__ have unionized since last fall. This year, __[Amazon](https://robinhood.com/stocks/AMZN)__ and __[Apple](https://robinhood.com/stocks/AAPL)__ workers also formed their companies’ first US unions. Union membership has declined for years, but support for unions is near record highs — which could lead to higher costs and more friction for companies.

Zoom Out

Stories we’re watching...

__Less money...__ still problems. __[Microsoft](https://robinhood.com/stocks/MSFT/)__, __[Google](https://robinhood.com/stocks/GOOGL)__, __[Meta](https://robinhood.com/stocks/META)__, and Apple are on deck to report this week. With recent layoffs and hiring freezes top of mind, investors expect second-quarter earnings to be tough for some — but not all — of tech’s major players. Analysts predict rougher #'s from Google and Meta as recession fears shrink advertising budgets. Meanwhile, Apple seems to be weathering the economic storm, expecting to report double-digit growth despite supply snags. Investors are optimistic about Microsoft's booming cloud biz. 

__Power to the Powell…__ To tame prices, the Fed hiked interest rates by an unexpectedly high 0.75 percentage point last month — the biggest jump since the ’90s. On Wednesday, America’s central bank is expected to [dish](https://www.wsj.com/articles/fed-officials-preparing-to-lift-interest-rates-by-another-0-75-percentage-point-11658068201) out another three-quarter-point hike. Some analysts [say](https://www.cnbc.com/2022/06/15/powell-says-the-fed-could-hike-rates-by-0point75-percentage-point-again-in-july.html) it should be *more* aggressive and raise rates by a full point. Last week, Europe’s central bank hiked rates for the first time in 11 years (’flation’s even worse there). But moving too fast could trigger (or deepen) a recession by slowing spending, investment, and hiring. 

Events

Coming up this week...

- __[Doc](https://snacks.robinhood.com/newsletters/2wPRmRTzXsZZPrXKhazVKD/articles/nQq3OLSTUFZH7JZu72XYC/):__ Amazon agreed to buy swanky healthcare provider One Medical for nearly $4B, its third-largest deal after Whole Foods ($14B) and MGM ($9B). It’s trying to Prime-ify the convoluted healthcare biz. 
- __[Tab](https://snacks.robinhood.com/newsletters/1svYxMtYC770D5o9qhKY30/articles/2qUpX8oEROIU32C7WYBAqH/):__ After a decade as a mobile-only app, Snap launched a desktop version to tap into the “side-tab economy” (think: shopping and scrolling mid-__[Zoom](https://robinhood.com/stocks/ZM)__ call). That could help it compete with __TikTok__ and Insta. 
- __[Fazed](https://snacks.robinhood.com/newsletters/5e5VqCskUQCsirR37ADYC6/articles/1JqdXLEbwqdapfKTXeb7Yd/):__ Viral gaming brand __[FaZe Clan](https://robinhood.com/stocks/FAZE)__ went public through a $725M SPAC merger. It’s a milestone for the creator economy, but FaZe’s 500M-strong following may not protect it against the SPAC-pocalypse.

ICYMI

Last week's highlights...

From Exxon to Valero, oil giants are expecting historic profits — but they may’ve peaked

Dow Jones

S&P 500

Nasdaq

Bitcoin

Humans’ ability to smell geosmin (the scent of wet earth after rain) is more powerful than sharks’ ability to smell blood in water

⛽ Oil’s profit peak

__Now available on Prime…__ colonoscopy appointments. Yesterday, __[Amazon](https://robinhood.com/stocks/AMZN)__ [announced](https://www.cnbc.com/2022/07/21/amazon-to-buy-primary-health-care-provider-one-medical-for-roughly-3point9-billion.html) it agreed to buy membership-based healthcare provider __One Medical__ for nearly $4B. It’s the Zon’s third-largest deal ever, after Whole Foods ($14B) and MGM ($9B). One Med, whose stock rose 60%+ yesterday, is a key partner for Amazon as it expands into healthcare:

- __Convenient:__ One Med offers patients 24/7 virtual and IRL care at its 200 swanky clinics through a sleek app. Think: tele-prescriptions and same-day app-scheduled visits. 
- __Subscription:__ Patients pay $200/year just for membership, on top of normal care costs, which can be paid through insurance or out of pocket.
- __Techy:__ Amazon wants to leverage One Med’s tech and network of nearly 800K members to “reinvent” healthcare (imagine: Alexa-powered checkups and Prime pill pickup). 
- The Zon’s given few details about how One Med fits into its plans, but said the current CEO will stay in place.

__Dr. Alexa just finished med school…__ but Amazon’s been quietly pushing into healthcare for years. The ecomm giant bought the online pharmacy PillPack for $750M in 2018 and used it to launch its own online pharmacy in 2020 (Prime members get free shipping). In 2019, the Zon launched a telehealth service for employees called Amazon Care. Last year, Amazon Care opened its service to US employers.

Amazon’s latest stab at healthcare (Thiago Prudencio/Getty Images)

Disrupt

__Healthcare’s about to get Prime-ified…__ Amazon’s already disrupted shopping, groceries, and movie streaming. Now it plans to disrupt the convoluted healthcare biz, which it said needs “reinvention.” The Zon tried to launch a healthcare biz called Haven in 2018 with __[Berkshire Hathaway](https://robinhood.com/stocks/BRK.A)__ and __[JPMorgan](https://robinhood.com/stocks/JPM)__, but it flopped because of a lack of healthcare experience, limited reach, and competing interests. This time around, Amazon may be more likely to succeed thanks to One Med’s know-how, streamlined strategy, and roster of 8K+ business clients.

Amazon buys swanky clinic chain One Medical for $4B in its quest to Prime-ify healthcare

__Checking Elon’s W-2…__ Over the past three years, top public companies reported paying [$2.1B](https://www.wsj.com/articles/companies-swallow-2-1-billion-in-taxes-as-executive-pay-climbs-11658395981?mod=business_lead_pos5) in taxes to cover executive pay (up more than 4X from 2019). Typically, corporations can deduct worker pay as a business expense when filing their taxes. For decades, companies could write off multimillion-dollar paychecks for high-performing, high-earning execs (and save on taxes). But the [2017 tax overhaul](https://corpgov.law.harvard.edu/2017/11/07/tax-reform-and-executive-compensation/) forced companies to pay the 21% corporate tax rate on all paychecks over $1M. Now companies are paying big bills on their execs’ big paydays:

- __[Tesla](https://robinhood.com/stocks/TSLA/)__ spent $447M on exec pay taxes over three years. Elon’s total comp: [$2.1B](https://seekingalpha.com/news/3593297-elon-musk-qualifies-for-another-2_1b-payday).
- __[Lennar](https://robinhood.com/stocks/LEN):__ The homebuilding behemoth racked up a $29M exec pay tax bill last year. 
- __[Howmet Aerospace](https://robinhood.com/stocks/HWM):__ The jet-engine giant has paid $21.5M in exec pay taxes since 2019.

__Payday…__ Corporate tax liabilities haven't stopped exec pay from swelling. Last year, CEOs of S&P 500 companies [earned](https://www.fastcompany.com/90770163/the-age-of-greedflation-is-here-see-how-obscene-ceo-to-worker-pay-ratios-are-right-now) $18.3M in compensation (think: salary, bonuses, stock) on average — 324X more than average workers. And while typical worker pay ticked up 5% (behind inflation), CEO pay [jumped](https://www.cbsnews.com/news/ceo-pay-rose-18-percent-while-worker-wages-trailed-inflation/) 18%.

__Paychecks are only part of the payday…__ About [83%](https://www.epi.org/publication/ceo-pay-in-2020/#:~:text=The%20composition%20of%20CEO%20compensation%20is%20shifting%20away%20from%20the,of%20average%20realized%20CEO%20compensation.) of big CEOs’ comp comes from stock awards. While legislators expect the new tax rule will raise $9.2B in revenue over a decade, not much has been done to address the fact that the [wealthy](https://snacks.robinhood.com/newsletters/1ExFruUiLLc3sM39AgchDw/articles/28rBswpihWiU8dO8VwzWyB/) often pay little to no income taxes compared to their net worth. Because while income is taxed, net worth isn't. 

Companies are paying billions in taxes on record-high exec paychecks — but it’s the tip of the compensation iceberg

Amazon buys swanky clinic chain One Medical for $4B in its quest to disrupt healthcare

The monarch butterfly is now endangered, with its population declining as much as 72% in the past decade

🩺 Amazon’s big health bet

__Buying your dream house…__ is becoming a nightmare. Demand for mortgages [hit](https://www.cnbc.com/2022/07/20/mortgage-demand-drops-to-lowest-level-in-22-years.html) a 22-year low last week, as more would-be buyers got squeezed out of a pricey market. Home sales have fallen for five months straight, as prospective buyers deal with a triple whammy of challenges:

- __Ceiling costs:__ The median price for an existing home hit a record $416K in June. Blame low inventory. 
- __Roof rates:__ The cost of borrowing $$ for a mortgage has nearly doubled this year as the Fed hikes interest rates. 
- __Crowded lawns:__ The average house is on the market for just 14 days before it’s sold, the shortest cycle on record. 

__Not keeping up…__ Median incomes in the US have increased 14X since 1960 — but median home prices have soared *36X*. The housing-affordability crisis accelerated during the pandemic as buyers ditch city rent for suburban mortgages — and priced out locals. And it’s getting worse:

- __Long road:__ By the end of this year, it’ll take 11+ years for a first-time buyer with median income to save for a 10% down payment. Pre-pandemic, it took half as long.
- __Broken system:__ The average US worker needs to pay about a third of their income to afford a median-priced home — the highest level since the ’07 housing bubble.

Outpriced in suburbia (Thomas Northcut/Getty Images)

Escrow

__The picket fence is out of reach…__ Homeownership was once a cornerstone of the American dream; now it’s becoming inaccessible for average families. Homes became less affordable in 97% of the US last quarter (FYI: last month rent also jumped at its fastest pace since 1986). And while housing inventory is expected to increase in the coming months, experts say 60% of Americans won’t be able to afford starter homes through 2025, especially those in communities of color.

Home sales have boomed during the pandemic, but now a brutal market is making the American dream distant for most

__FaZe SPAC...__ Gaming influencers just took themselves public. __[FaZe Clan](https://robinhood.com/stocks/FAZE)__ launched as a gaming YouTube channel in 2010. Think: mostly guys in gaming chairs posting “Call of Duty” "sniping" videos. Today, FaZe is an esports and media company with 93 members (including Snoop Dogg). In May, Forbes [ranked](https://www.forbes.com/sites/brettknight/2022/05/06/the-most-valuable-esports-companies-2022/?sh=7c9ed67d599f) it the fourth-most-valuable esports company. Yesterday:

- __FaZe went public on the Nasdaq__ after [completing](https://www.cnbc.com/2022/07/20/faze-clan-goes-public-in-725-million-spac-a-deal-for-creator-economy.html) a $725M merger with a SPAC (aka: special purpose acquisition company) called "B Riley Principal 150 Merger Corp." — claaaassic SPAC name.
- __The debut is a milestone for "creator economy"__ brands, most of which are private. FaZe has 500M followers across socials like YouTube, Twitch, and __TikTok__.
- __Fazed:__ Despite its viral clout, FaZe stock plunged 24% on its first trading day. FYI: it was planning to go public last year in a $1B deal, but that didn’t pan out.

__Unique timing…__ FaZe’s debut comes at a time when public offerings and SPACs have been struggling. Given the inauspicious macro environment, many planned SPAC deals have been canceled or put on ice. SPACs [boomed](https://snacks.robinhood.com/newsletters/2miYQo5VvBqToiUH0v2lTP/articles/147BXMVnvTG2cNtnGXSgCE/) mid-pandemic, accounting for ~70% of all IPOs last year. __[DraftKings](https://robinhood.com/stocks/DKNG)__, __[Virgin Galactic](https://robinhood.com/stocks/SPCE)__, and __[Opendoor](https://robinhood.com/stocks/OPEN)__ are just a few that went public through a SPAC. Now, the oversaturated market has lost steam and is riddled with losses.

Fazed

__Followers ≠ investors…__ FaZe calls itself the “first creator-based brand to go public,” but its impressive following may not be enough to lure investors. While it’s forecasting that revenue will nearly double this year to $90M, FaZe also expects a widening loss of $19M. In this unsteady environment, some investors have ditched “growth stocks” in favor of companies with steady profits. Companies that merged with SPACs [lost](https://www.cnbc.com/2022/06/27/spacs-wipe-out-half-of-their-value-as-investors-lose-appetite-for-risky-growth-stocks.html) half their value in the first six months of this year.

Viral gaming brand FaZe Clan goes public, but its 500M-strong following may not shield it from the SPAC-pocalypse

Mortgage demand falls to a 20-year low as a brutal housing market prices out many Americans

Minimum-wage workers in the US are earnings less now than they were 60 years ago (after adjusting for inflation)

🏠 Housing hits a wall

__All dried up…__ Europe’s at the boiling point of an epic energy crisis as political tensions and record heat waves ripple through the continent. This week, Russia’s __Gazprom__ (the [biggest](https://www.investopedia.com/articles/markets/082615/5-biggest-russian-natural-gas-companies.asp) natural-gas company by sales) halted exports to three major European customers citing force majeure — a stoppage for extraordinary circumstances. Europeans aren’t buying it:

- __Hot air:__ __Uniper__, Germany's largest gas importer, said the halt was “unjustified” (read: Gazprom has gas to spare). Uniper’s already tapped a $2B credit line and drawn down winter reserves to keep Germany’s gas-fueled electricity and A/C flowing.
- __Heat-pocalypse:__ Yesterday, the UK had its [hottest](https://www.npr.org/2022/07/19/1112220447/britons-awake-from-their-warmest-ever-night-and-brace-for-record-smashing-heat) day ever recorded, while the Netherlands had record July temps and France sent out extreme-heat warnings.

__Pipe problems…__ Russia [supplies](https://snacks.robinhood.com/newsletters/6oUasks4UHzb87QXAq6Z3b/) nearly half of the EU’s natural gas. Problem: over the past month, Gazprom’s [cut](https://www.reuters.com/business/energy/russias-gazprom-declares-force-majeure-gas-supplies-europe-2022-07-18/) its export capacity to 40%. The Nord Stream pipeline (the main connection between Germany and Russia) closed last week for an annual maintenance check. But Europeans worry that the force majeure signals Russia won't reopen its taps by tomorrow’s deadline. And Europe’s gas prices are already up 8X from a year ago.

Energy in crisis (Nikolay Doychinov/AFP via Getty Images)

Pump

__Europe’s crisis could be a global disaster…__ This year, Europe has [surpassed](https://www.bloomberg.com/news/articles/2022-07-15/europe-becomes-top-market-for-us-crude-as-war-upends-trade) Asia as the top importer of US oil for the first time since 2016 (because it’s getting *way* less gas from Russia). But US production isn’t growing fast enough to meet the needs of both continents and its own. Eventually, the energy crisis could cost European taxpayers [$200B](https://www.bloomberg.com/opinion/articles/2022-07-18/europe-energy-crisis-bailout-will-top-200-billion-if-russia-cuts-gas-supply) through higher energy bills and higher taxes. Globally, a tighter gas market could trigger more inflation, hurt economic output, and fuel a recession.

Europe’s energy crisis could get a lot worse as Russia’s gas-withholding moves threaten the global economy

__"Amaaazing quality, feels like silk"...__ probably a review for that paper-thin polyester __[Amazon](https://robinhood.com/stocks/AMZN/)__ PJ. More than a third of Amazon reviews are [estimated](https://www.ngpf.org/blog/question-of-the-day/qod-what-percent-of-reviews-posted-on-popular-e-commerce-sites-are-fake/#:~:text=About%2042%25%20of%20720%20million,millions%20of%20virus%2Davoiding%20shoppers.) to be fake or unreliable. Now the Zon is taking legal action to crack down on fake five-stars: yesterday, Amazon [filed](https://techcrunch.com/2022/07/18/amazon-lawsuit-fake-reviews-facebook/) a suit against administrators of 10K+ Facebook groups it accuses of brokering bogus reviews in exchange for money or free stuff.

- __Admins of one group__ are accused of [charging](https://www.cnbc.com/2022/07/19/amazon-sues-facebook-group-administrators-over-fake-reviews.html) Amazon sellers $10 for each good review. Another group, "Amazon Product Review," amassed 43K+ members before being removed.
- __Many of the groups__ are private, and posters try to evade moderators by omitting letters (think: “R*fund Aftr R*vew.”)
- __Amazon wants the groups to shut down__ and return their “ill-gotten gains.” Facebook owner __[Meta](https://robinhood.com/stocks/META/)__ has removed half of the groups reported — and is investigating others.

__Bluetooth headphones and supplements...__ some of the hardest-hit [categories](https://www.washingtonpost.com/business/economy/how-merchants-secretly-use-facebook-to-flood-amazon-with-fake-reviews/2018/04/23/5dad1e30-4392-11e8-8569-26fda6b404c7_story.html) for fake reviews. Phony write-ups have become a growing headache for Amazon, whose marketplace now includes millions of third-party sellers. It's not just a Facebook problem: illicit review communities have thrived on social apps like WhatsApp, __Telegram__, and WeChat.

- __Moderate:__ Amazon has said that it uses a mix of AI and human moderators to hunt fake reviews, and has reported thousands of groups to social companies.
- __Spiral:__ Still, thousands of bogus reviews keep cropping up across the Zon’s massive storefront — and sneaky sellers and review brokers are cashing in.

Phony

__Phoniness is a trust-killer…__ Amazon isn’t the only one plagued by the fake-review biz: __[Yelp](https://robinhood.com/stocks/YELP)__, __[TripAdvisor](https://robinhood.com/stocks/TRIP)__, and __[Google](https://robinhood.com/stocks/GOOGL)__ [have](https://uberall.com/en-us/resources/blog/how-big-a-problem-are-fake-reviews) the same problem (see: [non-existent](https://www.youtube.com/watch?v=bqPARIKHbN8) restaurant hits #1 on TripAdvisor). Five-star reviews might be the reason you spend your hard-earned money on something. Misleading reviews could cause you to lose trust in a platform, threatening review-reliant businesses like Amazon.

Amazon sues 10K Facebook groups over brokering fake reviews, as phony five-star operations erode customer trust

Europe’s energy crisis could get worse as Russia’s gas-withholding moves threaten the economy

Use of private jets is more popular than ever, with first-time buyers driving record sales

⛽ Europe's energy crisis

__Vintage, *so* adorable...__ not the "Mean Girls" skirt. __[Snap's](https://robinhood.com/stocks/SNAP)__ latest move is so old school it's almost innovative. After more than a decade as a mobile-only app, the little ghost is coming for your laptop. Snap’s [launching](https://techcrunch.com/2022/07/18/snap-launches-snapchat-for-web/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAJbPG4JQFdOC6X2K7Q-pTh0GDSR7bloWyh5rD0ZPjBJhXZI7N5TMlQZbn8l8dIYB554GSwdv6lKeRH2NmmIkBJ1UtJlKbLUvjwFkyv6nrpU26A7VbWFKFCrckElUflVsW4ttgutnkZfnBn6wtN77gx3TzDnwP0OLhyGtz8JCJiWY) a web version so that you can send disappearing puppy-face pics on your desktop too.

- __Snapchat for Web__ will initially be available only to subscribers of Snapchat+, its new $4/month subscription. And only in the US and some other English-speaking countries.
- __Do less:__ The site will launch as a stripped-down version of the app, focused on chats and video calls (no Stories yet). Snap says its average caller spends 30 minutes/day on calls.

__Feeling ghosted...__ by investors. Snap stock is down 70% this year after it said it would miss its earnings guidance for its latest quarter (FYI: it reports Thursday). In May, Snap [warned](https://snacks.robinhood.com/newsletters/1EzhZ46qpAaHVRxvK5GHKD/articles/4rTFcuUN3cezdd8ZYULeg1/) of slowing growth. Now it's trying to spark engagement with its core user base:

- __Save the Snap streak:__ Snap [says](https://investor.snap.com/overview/default.aspx) it’s used by more than three-quarters of 13- to 34-year-olds in key markets, like the US and UK. These Gen Z’ers and millennials will be more likely to Snap between classes and __[Zoom](https://robinhood.com/stocks/ZM)__ meetings. 
- __Case in point:__ Snap’s web offering features a privacy screen that hides the Snap window when you toggle away for another task (think: Excel when your boss walks by).

Snap goes back to the future (Snap Inc./Getty Images)

__The side-tab economy has intensified…__ since the rise of WFH. The side-tab economy = everything you do on your desktop between __[Google](https://robinhood.com/stocks/GOOGL)__ Meets, classes, and deadlines — from bathing-suit shopping to __[Twitter](https://robinhood.com/stocks/TWTR)__ scrolling. Snap wants to be a tab you always have open during your workday. And its biggest rivals, __TikTok__ and Insta, already have web offerings.

Snap finally launches a desktop version of its app, tapping into the infamous yet lucrative “side-tab economy”

__McMutiny…__ __[McDonald’s](https://robinhood.com/stocks/MCD)__ franchise owners are not lovin’ Chris: in a recent survey, 87% of McD’s restaurant owners [indicated](https://www.cnbc.com/2022/07/18/mcdonalds-franchise-owners-back-no-confidence-vote-on-ceo-survey-says.html) they disapprove of CEO Chris Kempczinski. That’s not ideal, since franchisees own 95% of the nearly 14K McDonald’s restaurants in the US. Two years ago, there was a [turf war](https://snacks.robinhood.com/newsletters/3W2qDBQC1zd66GBLGKcPH5/articles/6HVDpykBMdbjucEqIYnyUg/) over Happy Meals. Now there’s fresh beef:

- __McDynasty:__ Last summer, McD’s added new fees for passing on franchise licenses to family members. Burger heirs now have to pay fees to inherit Golden Arches from their parents.
- __Two sides of the same patty:__ McD’s says it’s trying to expand franchisee diversity. The chain plans to offer $250M in loans to boost ownership diversity (FYI: it [costs](https://www.wsj.com/articles/mcdonalds-tightens-restaurant-ownership-rules-as-it-looks-for-new-franchisees-11656010130) at least $1.4M to open a McD’s). But owners say the new rules are just an excuse for corporate to charge higher fees and mandate costly training.

__Nuggets of success…__ The franchise model usually benefits both sides: companies make big bucks renting out real estate, brand IP, and deep fryers, while owners profit from beloved chains. Subway, Dunkin, and __[Marriott](https://robinhood.com/stocks/MAR)__ are all heavily franchised. But during the pandemic tensions between franchisees and their corporate overlords rose as companies imposed new rules and demanded higher fees.

Flurry

__Franchises are symbiotic relationships…__ but inflation and other stresses can throw off their balance. McD’s scaled into the world’s largest burger chain thanks to its franchisees. In return, franchisees got a taste of McD’s fame — and profits. But new rules are alienating franchisees, which could hurt business. Last year, the number of McD’s owners who sold their franchises boomed, and the number of US McD’s locations has fallen since 2019.

McDonald’s franchisees are beefing with their CEO, which could strain the Golden Arches’ core business model

Snap launches a web version of its app, tapping into the WFH-friendly “side-tab economy”

Hulu is Disney’s fastest-growing US streaming service, driving more subscriptions than Disney+

👻 Side-tab economy

__[Netflix](https://robinhood.com/stocks/NFLX/) is down...__ in more ways than one. On Friday, the struggling streamer was briefly [down](https://www.ndtv.com/world-news/netflix-down-for-thousands-of-users-report-3162705) for some users — putting shows like "The Umbrella Academy" and "How to Build a Sex Room" out of reach. But downtime isn't the Flix's only problem: the stock's down 70% this year as subscriptions sag and revenue growth slows.

- __Skip intro:__ Probably what Netflix wishes it could do with quarterly earnings, which it reports tomorrow. If first-quarter results are any indication, things aren't going well.
- __Sub-pocalypse:__ Netflix *lost* 200K subscribers when it was [expected](https://snacks.robinhood.com/newsletters/1hJKveGEOmvpzuLtfVejiF/articles/43M2Oild3MGMPYMecA8Q7K/) to add 2.5M. Blame post-lockdown #subscripturation.
- __Next episode:__ Netflix [said](https://www.latimes.com/entertainment-arts/business/story/2022-07-13/lat-et-ct-netflix-ads-microsoft) it expected to lose 2M subscribers in the second quarter (aka: the one it reports tomorrow). This year it’s [cut](https://www.cnbc.com/2022/06/23/netflix-lays-off-300-more-employees-as-revenue-growth-continues-to-slow.html#:~:text=Netflix%20is%20laying%20off%20around,subscriber%20loss%20in%20a%20decade.) 450 jobs.

__Stranger things’ve happened...__ In 2019, Netflix CEO Reed Hastings said his streamer would never do ads, “period.” Now: Netflix is doing ads. In April, it [announced](https://about.netflix.com/en/news/netflix-partners-with-microsoft) it would launch a cheaper ad tier. The goal: attract and retain subs. High prices (#flation) + subscription overload (#subscripuration) have made it harder for consumers to afford multiple streamers.

- __Soft landing:__ Last week Netflix said it was [partnering](https://www.cnbc.com/2022/07/13/netflix-partners-with-microsoft-on-ad-supported-subscription-plan.html) with __[Microsoft](https://robinhood.com/stocks/MSFT/)__ to build out ads. Microsoft's ad biz isn't as big as that of its rivals, like __[Google](https://robinhood.com/stocks/GOOGL)__ and __[Comcast](https://robinhood.com/stocks/CMCSA/)__, but it's one of the few big techies without streaming ties.
- __Hard pivot:__ This year Netflix has [hiked](https://www.theverge.com/2022/3/24/22993562/netflix-price-increase-us-plans-2022#:~:text=History%20of%20Netflix%20price%20increases&text=Netflix%20first%20alerted%20subscribers%20to,month%20(up%20from%20%2417.99).) prices to make up for sagging growth and support its original content spend, which ballooned to [$13B+](https://variety.com/2021/digital/news/netflix-content-spending-2021-amortized-1235072612/) last year (“Stranger Things” season four reportedly cost [$30M](https://www.star959.ca/2022/04/22/netflix-drops-3-million-per-episode-stranger-things-season-4/#:~:text=According%20to%20Complex%2C%20%E2%80%9CIn%20an,episode%20cost%E2%80%9D%20of%20%2430M.) per episode).

The ads are coming (Christophe Archambault/AFP via Getty Images)

Down

__To keep your identity, you may have to lose it…__ To maintain its rep as the #1 streamer famous for original content hits, Netflix must do something we thought it never would: Hulu-fy itself with ads. After its first subscriber loss in a decade, Netflix had to choose between cutting down on content spending or cutting the cost of its service. Ads could be a big profit puppy, but might cost Netflix its frictionless prestige.

Netflix’s earnings could reveal millions of lost subscribers — now it’s pivoting to ads for growth, but might lose its identity

__$2 croissant…__ keep the exchange. One euro was worth one US dollar last week (and briefly less) for the [first](https://snacks.robinhood.com/newsletters/SkTOGg1xV6SnxVuVYutGu/articles/3nLZFQn0R9td4zOyIrCM0z/) time in decades. Investors have ditched euros as comparatively higher US interest rates strengthen the $, while Russia’s war on Ukraine darkens Europe’s growth outlook. It’s good for American tourists (think: cheaper paella and prosecco): 7X more Americans are taking Eurotrips this year. But a strong dollar makes US exports more expensive (think: pricier Pop-Tarts), which could dampen spending and investing from abroad.

__Crypto regulators...__ mount up. After __Celsius'__ collapse and __TerraUSD's__ [implosion](https://snacks.robinhood.com/newsletters/CZLtSSO02dkWUNfYSsz7D/articles/40vJyepmLGsyVSkxrAJx2M/), regulators are speaking up. The Fed's vice chair said it's time to establish clear rules for what's permitted in crypto, and both the European Central Bank and the Financial Stability Board (a global regulator) called for stablecoin regs. Meanwhile, the US Treasury's asking for public comment on crypto's risks as it preps a report for President Biden. And as retail investors continue to feel crypto winter's chill, regulatory pressure will likely keep heating up. 

__Running on E…__ __[Tesla](https://robinhood.com/stocks/TSLA/)__ reports on Wednesday, but we already know that its record delivery streak is over. Last quarter, Tesla deliveries [fell](https://snacks.robinhood.com/newsletters/6fyXoeZno4t269xTNw1jzf/) for the first time in over two years (blame: China’s Covid lockdown). To ramp up output, Tesla’s upgrading its Berlin and Shanghai factories — but that’ll halt production at the major plants for weeks. Elon’s “super bad feeling” about the economy led to 200+ layoffs in June and (another) set of Tesla price hikes. Still, Tesla demand is hot. Its Model Y was China's best-selling [SUV](https://thedriven.io/2022/07/12/tesla-model-y-regains-title-of-best-selling-suv-in-china-in-june/) in June. 

__A shot in the arm...__ __[Johnson & Johnson](https://robinhood.com/stocks/JNJ)__ drops quarterly earnings tomorrow, and investors have good vibes (the stock’s up this year, and that’s saying a lot). Analysts expect quarter-over-quarter sales growth for the 136-year-old company, which has become more associated with vaccines than Tylenol and Band-Aids. J&J had forecast up to $3.5B in vax sales this year, but walked that back as demand for shots sagged. Now health officials are pushing booster shots to combat the "worst version" of the virus, and US Covid hospitalizations are on the rise — nearing 6K a day.

- __[Spin](https://snacks.robinhood.com/newsletters/iw2tCwjTCvnTryUaqDDzb/articles/3CSchWJYP4rfiMdi0AGrzJ/):__ Former pandemic darling __[Peloton](https://robinhood.com/stocks/PTON)__ will stop making its own bikes and treads and start outsourcing all manufacturing. Peloton spent hundreds of millions to build up its hardware production capacity, but is now focusing on subscription revenue. 
- __[NVM](https://snacks.robinhood.com/newsletters/5oBUesSUkpDaVaq0bcqdeg/articles/4GkTIo9uCyziM88BBuqVP9/):__ Elon Musk is trying to back out of buying __[Twitter](https://robinhood.com/stocks/TWTR)__ for $44B (a 38% premium to Twitter’s value when he sealed the deal). Musk blames bots but Twitter’s suing him to close the deal, saying he blew off meetings.
- __[Gulp](https://snacks.robinhood.com/newsletters/3sEIjxlKSSXYEV1NfRZUL/):__ From gas and rent to dental care and airfare, US consumer prices spiked 9.1% last month from a year earlier. It was the fastest inflation pace since 1981, and the Fed might get even more aggro with its rate hikes.

Netflix’s earnings could feature millions of lost subscribers — now it’s pivoting to ads for growth

“Stranger Things” season four attracted 7.2B viewing minutes from May 30 to June 5 — by far the highest weekly total ever recorded for any streaming

🍿 Netflix’s big pivot

__Didn’t need the facial steamer…__ but the influencers ship it. __[Amazon](https://robinhood.com/stocks/AMZN)__ said its live streaming service, where you can shop along with influencers, helped make Prime Day 2022 its [biggest](https://www.cnbc.com/2022/07/14/amazon-prime-day-results-more-than-300-million-items-sold.html) yet. During the two-day event, Amazon Live streams racked up 100M views while shoppers snapped up 300M items — 50M more than last year. That’s nearly 100K items a minute. 

- __Top sellers:__ __[Apple](https://robinhood.com/stocks/AAPL)__ Watch Series 7, Le Creuset cookware, Pampers diapers, LeapFrog toys, and Levi’s. 
- __Bottom dollar:__ Households [spent](https://www.numerator.com/prime-day) $145 on Prime Day, on average, with most items costing less than $20.
- __Top ’flation:__ Consumer prices are up 9% from last year, but price pain may’ve boosted Prime Day because shoppers [flocked to](https://www.ipsos.com/en-us/knowledge/consumer-shopper/How-Inflation-is-Changing-Consumer-Behavior) discounts.

__Post-Prime blues…__ Yesterday, Amazon tried to settle a years-long European antitrust lawsuit — and avoid billions in fines — by agreeing to stop collecting private merchant data (think: revenue, shipments, and inventory). That third-party data lets Amazon peek at rivals’ sales patterns, which regulators say helps it get ahead of competitors with products like Basics. If accepted, Amazon's settlement would apply only to its EU biz. But it could affect operations elsewhere if the Zon decides to streamline policies for potential data-privacy [legislation](https://www.theverge.com/2022/6/14/23167705/data-privacy-legislation-bill-compromise-energy-commerce-cantwell-pallone) in the US.

A truckload of Prime (Robert Nickelsberg/Getty Images)

Strime

__Amazon may be too dominant to fail…__ The Zon is no stranger to scandal, from worker-treatment controversies to privacy issues. It just disclosed that it [shares](https://www.politico.com/news/2022/07/13/amazon-gave-ring-videos-to-police-without-owners-permission-00045513) Ring video footage with police without owners’ permission. And a recent study found that its warehouse workers [suffer](https://www.cnbc.com/2022/04/12/study-amazon-workers-suffer-serious-injuries-at-twice-rate-of-rivals.html) serious injuries at twice the rate of its rivals. But as Prime Day shows, Amazon seems to have the scale and pricing power to stay on top.

Amazon scores its best-ever Prime Day despite inflation anxiety and political headwinds

__Time to plan that Eurotrip...__ Yesterday, one euro was [worth](https://www.wsj.com/articles/euros-slide-below-dollar-reflects-europes-sinking-economic-fortunes-11657805525?mod=markets_lead_pos1) exactly one US dollar, and briefly *less* than the USD. The euro had been more valuable than the dollar for two decades (almost its entire existence). But the currency has lost more than a tenth of its value this year, while the dollar has *appreciated* relative to other top currencies. What’s driving it:

- __Higher interest:__ Investors have ditched euros as comparatively higher interest rates in the US strengthen the dollar (higher interest = $$ is more expensive to borrow).  
- __Higher growth:__ The euro selloff continued last week as Russia threatened to cut Germany’s gas supply, hurting Europe’s economy. While the US’s economic growth outlook isn’t great, Europe’s is worse.
- __Higher confidence:__ The USD’s stable rep has long made it the world's reserve currency for international purchases, and demand is climbing.  

__Cheaper chianti in Kansas…__ pricier Pop-Tarts in Palermo. The euro’s drop has global implications. The discounted euro makes it cheaper for Americans to frolic around Rome and Paris ($1 buys you more euros). But it makes it pricier for Europeans to import US products — and less lucrative for Italians to export their prosciutto. A stronger dollar makes investing outside the US less appealing to Americans, since returns in other currencies translate to fewer $$.

Eurotrip

__Being too strong can be a weakness…__ A strong dollar’s great for Aperol-spritz-sipping Americans abroad. But if the dollar keeps appreciating, US investment and exports could dip as global investors get priced out. American corporate earnings could also suffer, since 40% of S&P 500 revenue comes from abroad. Some analysts expect the euro to lose another tenth of its value before stabilizing.

The euro dipped below the dollar, which may lead to cheaper chianti — and bigger trade issues

Amazon scores its biggest Prime Day ever despite soaring prices and political headwinds

Average rent in Manhattan jumped to a record $5K in June, up 30% from a year earlier

📦 Amazon’s Prime time

__Price-a-Roni…__ the super-costly treat. June inflation numbers are turning heads. US consumer prices spiked 9.1% last month from June of last year — the fastest pace of inflation since 1981, and worse than economists expected. It's not just gas prices that have Americans couch-cushion-diving for spare change:

- __Fettu-spendy:__ Staples like rice, pasta, and cornmeal were up 14% year over year.
- __Flossy:__ Dental care shot up nearly 2% month over month, the largest monthly bump ever.
- __Fleeced:__ Rent prices jumped 0.8% from May to June, the largest monthly spike since 1986.
- __Air pain:__ Airfare dropped 1.8% for the month, but was up 34% year over year.

__Tell me somethin’ I don’t know…__ Americans have been feeling the squeeze for a while, but June’s #s are a big blow to already fraying wallets. Wage hikes aren’t keeping up: inflation-adjusted incomes were *down* 1% over the month. For many, there's not much budget wiggle room: people are eating into their savings and racking up debt to keep up with bills.

Crying over ’flated milk (Stefani Reynolds/AFP via Getty Images)

Gulp

__Inflation has some stubborn spots…__ Americans are getting tired of hearing “inflation may have peaked,” especially after last month’s report. But *this* month, prices for inflation drivers like gas, corn, and metals have been falling. Still, stubborn staples like groceries aren’t showing many signs of easing. Now the Fed might raise interest rates by as much as 1 percentage point — up from previous expectations of a 0.75 hike.

June’s bummer inflation report highlights the American pinch, but experts hope the worst is over

__Dustin’ off the passport…__ and savin’ the free peanuts. __[Delta](https://robinhood.com/stocks/DAL)__ [flew home](https://www.cnn.com/2022/07/13/business/delta-earnings/index.html) a $735M profit last quarter, the biggest since the pandemic began. Packed planes, ludicrous fares, and Delta's oil refinery drove sales up 10% from 2019 — surpassing pre-pandemic levels for the first time. But investors weren’t impressed: Delta shares fell 5% yesterday, and __[United](https://robinhood.com/stocks/UAL)__ and __[American](https://robinhood.com/stocks/AAL)__ dropped ahead of their reports next week. Still, things are looking up:

- __Corporate comeback:__ Delta's lucrative US business travel recovered to 80% of pre-pandemic levels, and it expects an even bigger corporate [rebound](https://skift.com/2022/07/13/delta-expects-big-return-of-business-travelers-this-fall-recession-or-not/) this fall.
- __Vacation vengeance:__ More than half of Americans planned to book a summer vacay, even with ticket [prices](https://www.npr.org/2022/06/16/1105323610/flight-tickets-inflation-pandemic-revenge-travel-vacation-europe-recession) up 35% from last year.

__3-hour flight…__ 8-hour layover. It's been a tumultuous summer for fliers as they battle hours-long TSA lines and endless delays and cancellations. Airlines took on packed flight schedules to make up for years of slowing revenue. But instead, fuel costs and labor have led to more canceled flights so far this year than all of 2021. Now Delta’s slowing flight growth to avoid more disruptions.

- __Flight fatigue:__ Delta pilots have been on strike after working more overtime than in 2018 and 2019 combined. Now Delta’s spending an [extra](https://abcnews.go.com/Business/wireStory/delta-posts-735-million-profit-sees-strong-revenue-86730301) $700M to stay staffed up.

Biscoff

__Travel-pocalypse hasn’t hit the bottom line…__ it may’ve even helped. You’d think all the delay and cancellation headaches would hurt airlines, but they’re just driving up seat prices. Case in point: American (the world’s largest airline) predicted a 12% jump in June revenue from three years ago. Airlines could return to full profitability next year.

Delta posted its biggest profit since the pandemic began as the travel-pocalypse boosts it bottom line

Inflation accelerated in June as prices spiked 9%, but experts hope the worst is over

Amazon, Microsoft, and Google control two-thirds of global cloud spending

👛 June inflation gloom

__Hour-long Backstreet Boys ride...__ all uphill. __[Peloton](https://robinhood.com/stocks/PTON)__ has been on the struggle bus this year. In January it [paused](https://snacks.robinhood.com/newsletters/2aaB9GnrWgVHhjJd7bFJu/articles/1cvFtVr0b2fj1m1iC9AgUW/) production of its pricey fitness equipment as unsold spin bikes and treadmills piled up. Now the money-losing company will [outsource](https://www.cnbc.com/2022/07/12/peloton-to-outsource-all-manufacturing-as-part-of-its-turnaround-efforts.html) all its manufacturing:

- __Spinning out:__ Peloton's Taiwanese partner, __Rexon Industrial__, will become the primary manufacturer of its bikes and treads, to save Peloton money on expensive US production. In February, Peloton scrapped plans for a $400M Ohio factory.
- __Reverse, reverse:__ Mid-pandemic, Peloton spent hundreds of millions to build up in-house US manufacturing. The goal: avoid overseas-shipping snags. The assumption: pandemic-fueled demand would stay high for years (spoiler: it didn't).

__Waited so long for the P-ton...__ that your shipping address is outdated. Peloton’s sales [boomed](https://snacks.robinhood.com/newsletters/2FM1iMyeVeUcmesr5FeXMu/articles/1AzQxmgq3tbqbN9ybVg8oS/) in 2020 as its $2.2K spin bikes rode off shelves. *Then things took a turn for the worse:* equipment sales have plunged 40% from a year ago, and Peloton notched its biggest quarterly loss as a public company in May. Wild stat: the value of unsold equipment has surged to $1.4B, up from just $19M two years ago. Peloton was worth $50B at its height, but its market cap has plunged to $3B.

Uphill sweat sesh (Ezra Shaw/Getty Images)

Reverse

__Pricey hardware is hard to bear…__ Owning several steps of production works for behemoths like __[Apple](https://robinhood.com/stocks/AAPL)__, __[Amazon](https://robinhood.com/stocks/AMZN)__, and __[Tesla](https://robinhood.com/stocks/TSLA)__, whose scale makes relying on third-party manufacturers untenable. But for strugglers like Peloton, making hardware in house can be financially unsustainable. That’s why Peloton’s new CEO is [pivoting](https://www.cnbc.com/2022/07/12/peloton-to-outsource-all-manufacturing-as-part-of-its-turnaround-efforts.html) it to be a subscription-focused company (not an equipment maker). Peloton has slashed hardware prices while hiking monthly subs from $39 to $44.

Peloton will stop making its own equipment, as the former pandemic darling pivots its focus from spin bikes to subs

__Off the rack…__ __[Gap](https://robinhood.com/stocks/GPS)__ shocked investors yesterday by replacing CEO Sonia Syngal barely two years after hiring her for the top job (exec chairman Bob Martin will be interim chief). Shares of the ’90s hoodie legend [sank](https://robinhood.com/stocks/GPS) 5% after news of Syngal’s departure — and they’ve lost over half their value this year.

- __Investors praised Syngal__ for quickly adopting pandemic trends like curb-side pickup and online options, but it wasn’t enough to offset slowing sales. 
- __Gap posted a $162M loss__ last quarter (compared to a $166M profit a year before) as late-arriving shipments made it harder to keep up with fast-fashion trends.

__Wayyy-too-oversized hoodie…__ Over half of Gap's sales [come](https://www.wsj.com/articles/gap-inc-says-ceo-sonia-syngal-is-stepping-down-11657572509) from its Old Navy stores. Last summer, Old Navy execs ordered a wide range of clothing sizes to promote inclusivity and boost sales. But it backfired: too many XXS and XXL and not enough midrange sizes sparked a nearly 20% sales [drop](https://finance.yahoo.com/news/gap-ceo-becomes-latest-exec-to-depart-struggling-retailer-220523825.html) last quarter. Gap had to cut its profit forecast to zero as it launched steep discounts to offload bulky inventory. Gap’s other brands are doing better:

- __Athleta:__ The __[Lulu](https://robinhood.com/stocks/LULU)__-lookalike opened dozens of new athleisure stores last year, but $50M in airfreight and other charges are expected to offset profits.
- __Banana Republic:__ Sales grew 27% last quarter thanks to #weddingszn and return-to-office — but BR makes [up](https://craft.co/gap/revenue) only one-tenth of Gap’s revenue.

Racked

__Gap’s halo effect is fading…__ It’s known as a family brand, where households can shop for everyone all at once (think: overalls for kids, button-ups for dad). But off-season styles and mismatched sizes have made it less of a family go-to. That could be a problem heading into back-to-school season — one of the year’s busiest shopping periods.

Hoodie icon Gap replaces its latest CEO as mismatched sizes and piled-up inventory dim its “halo effect”

Peloton will stop making its own equipment as it pivots focus from spin bikes to subscriptions

The US dollar and the euro were worth the same yesterday for the first time in 20 years, as euros lose value against USDs

🚴 Peloton’s hard pivot

__Cancel order...__ Easy for pizza. Harder when your order is a $44B merger with a public company. In case you've been living under a __SpaceX__ rocket: Elon Musk is [backing out](https://www.theguardian.com/technology/2022/jul/08/elon-musk-buy-twitter-withdraw) of his bid to buy __[Twitter](https://robinhood.com/stocks/TWTR/)__ — or at least he's trying to. A quick timeline of the saga:

- __Mid-April:__ After becoming Twitter's largest shareholder with a 9% stake, Elon offers to buy the rest of Twitter's shares at a 38% premium to their price.
- __Late April:__ After a few weeks of "omg Elon wants to buy Twitter I'm so sad/happy" drama, Musk reaches a deal to buy Twitter for $44B. 
- __Early May:__ Musk announces plans to boost Twitter's revenue and make it a "free speech" platform. But never mind: the deal's on ice as Elon investigates the # of Twitter bots.
- __Late May:__ Elon says Twitter undercounts bots on its platform, claiming that 20% are "fake/spam accounts." The deal can't move forward till he gets more info.
- __Now:__ Elon’s moving to terminate the deal over the bot thing, but Twitter is "[committed](https://www.cnbc.com/2022/07/08/elon-musk-notifies-twitter-he-is-terminating-deal.html) to closing the transaction" at the agreed price — and has reportedly [hired](https://www.bloomberg.com/news/articles/2022-07-10/twitter-assembles-legal-team-to-sue-musk-over-dropped-takeover) lawyers to sue. Yesterday Twitter [called](https://www.cnbc.com/2022/07/11/twitter-says-musks-request-to-terminate-the-deal-is-invalid.html) Elon’s attempt to terminate the deal “invalid.”

__Twitter-finger jitters...__ This situation is a big #facepalm, especially for Twitter shareholders. Twitter stock soared in April after Elon agreed to buy it at a premium of $54.20/share — which would make Twitter worth $44B. The stock’s dropped 16% since Thursday, giving Twitter a $25B market cap.

Looking for an exit like (Angela Weiss/AFP via Getty Images)

__Expectations breed disappointment…__ Nothing’s really changed about Twitter: it’s still the same biz, where revenue and user growth are slowing. But *expectations* of a pricey Elon-quisition boosted its value. Now all possible results look bad for Twitter: either it forces someone who *doesn’t want* to run Twitter to buy Twitter, or it loses an expected multibillion-dollar payday for investors.

Twitter says Elon’s attempt to end his $44B buyout is “invalid,” leaving the social biz between a rock and a Musk place

__Bad spotlight…__ The biggest crypto exchange on the block could be in for some US regulatory scrutiny. Reuters [reported](https://www.reuters.com/technology/exclusive-binance-served-crypto-traders-iran-years-despite-us-sanctions-clients-2022-07-11/) that __[Binance](https://robinhood.com/crypto/BUSD/)__ allowed Iranians to trade on its platform, despite 2018 US sanctions and an internal company ban. The sanctions were designed to curb money movement for Iran’s nuclear program and financial support for its proxy states in the region. Human-rights activists said they hurt ordinary Iranians. 

- __In 2019 and 2020:__ Binance employees reportedly internally celebrated their Iranian user base. Iranians said they liked the exchange because until mid-2021 all you needed to trade was an email address.
- __Last year:__ The blockchain behemoth, which claims [120M](https://www.bloomberg.com/news/features/2022-06-23/binance-bnb-ceo-moves-to-dubai-as-us-regulators-target-the-crypto-exchange) users, tightened its anti-money laundering — booting Iranian customers in the process.
- __Now:__ It's unclear what consequences Binance might face (if any) since its main exchange is not a US company. 

__Bad timing…__ Being accused of letting customers evade sanctions is never a great look, and it follows increased global calls for crypto regulation. The European Central Bank is pushing for stablecoin regs, and last week the US Treasury said governments need to come together to make it harder to launder with crypto.

Cryptic

__Crypto’s big value prop is double-sided…__ It's supposed to be permissionless: traders don't need a third party (like a bank) to approve transactions. But not everyone's a fan: regulators highlight this feature as a global financial risk that can empower criminals and sanctioned countries. When industry titans like Binance make headlines for not playing by the rules, tougher regulations likely aren’t far behind.

The world's largest crypto exchange reportedly let Iranian users trade despite sanctions, which could bring more regulatory heat

Twitter says Elon’s attempt to end his $44B buyout is “invalid,” leaving it with bad options